Greek and European prospects for 2015 – Interview in L’Antidiplomatico

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Interviewed by Alessandro Bianchi on Greece and Europe in the run up to the Greek general election of 25th January 2015

Click here for the L’Antidiplomatico site or, for the English original,…

European media often speak of the “Greek recovery” and the growth of competitiveness of the country to try to persuade the public opinion about the effectiveness of austerity and structural reforms imposed by the Troika. Considering the macroeconomic data, however, we find a youth unemployment above 50%, a negative inflation rate and a debt-deflation spiral out of control. How is it possible to speak of “recovery” when three Greek citizen out of five have exceeded the poverty line?

Over the past two years, no fact could get in the way of the EU propaganda machine which, approximately eighteen months ago, went into overdrive in an attempt to shore up the Samaras government, terrified at the prospect of a new government in Athens that insists of speaking truth to power. Have you noticed how the ‘Greek Success Story’ narrative disappeared once elections became inevitable? What kind or ‘recovery’ was it that went up in a puff of smoke the moment an election appeared over the horizon?

The answer is: a ‘recovery’ that existed only in the realm of propaganda. A ‘recovery’ that was engineered by means of two new bubbles, one in the bond market the other in the market for Greek banking shares – bubbles that burst the moment the Greek people seemed as if they were to have a chance to express what they felt about the said ‘recovery’ in the polling stations. A ‘recovery’ evidenced in one quarter’s positive GDP growth (equal to 0.7%), after seven years of continuous decline, which was due to the sad fact that nominal GDP fell – but for the first time it fell less than average prices did.

So, let’s be frank: There was no recovery. What we did have was a monstrous denial that was functional to the story Mrs Merkel wanted to convey to European citizens: If austerity worked even in Greece, it must be the right cure for every European realm, and it must thus be accepted unthinkingly by every European – especially the… Italians.

In Greece there will be a general election next January 25, 2015. According to the latest polls, SYRIZA, the main opposition party critic of the austerity measures imposed by the Troika, could be the winner. But, victory at the polls could be precluded by the speculative attack of the markets on spread, aimed at creating a climate of terror among the public. What remains of democracy in this oligarchic regime of the European Union? And the same scenario could be repeated in other countries with those parties critical of the institutional architecture of the EU?

The threat to a SYRIZA government will not come from the markets. Remember: Greece is bankrupt and is not borrowing from private investors. When you do not borrow, you do not care about the interest rate! No, the threat to a SYRIZA government comes from the ECB, from the EU and from Berlin. Days after its election, there is a strong chance that our European partners’ officials, in violation of democracy’s – and logic’s – most basic principles, will threaten the new Athens government with a shutdown of Greece’s banking system until and unless it bows to their will. This is far, far worse, and morally more reprehensible, than being terrorised by the markets. Investors have every right to demand high interest rates in order to lend you money. Fellow democratic governments and unelected central bankers have no right to threaten a newly elected government with Armageddon if it dares ask for a renegotiation of an unsustainable loan agreement with the EU, the ECB and the IMF.

In its program, SYRIZA provides for the annulment of the Memorandum, the complete restructuring of the public debt, the refusal to pay interest on it until it will be a real economic recovery (suspension of payment of the debt) and, finally, the ECB becomes lender of last resort in order to guarantee a portion of the debt Greek. Given the hostile attitudes of Berlin, Brussels and Frankfurt, how would SYRIZA react facing a new absolute denial of the European authorities compared to its demands? Would it be the pretext to consider the unilateral exit from the euro zone?

Exit from the euro is not an idea that a SYRIZA government will ever entertain or use as a negotiating strategy. While it is clear that Greece should never have entered the Eurozone (and, indeed, that the Eurozone should never have been designed the way it was), exiting would inflict massive damage upon everyone. At the same time, the ‘logic’ of the current agreement is busily working toward dismantling the Eurozone. Italy’s social economy for instance is unsustainable under policies inspired by those first tried in Greece in 2010. To save the Eurozone, and indeed to save Europe’s integrity and soul, we need a New Deal for Europe. SYRIZA is determined to kickstart the conversation on what this New Deal should be. Naturally, the outcome of such a debate will be a compromise. Alexis Tsipras, SYRIZA’s leader, knows this: When you are entering a negotiation, you are aiming at a compromise with which all sides can live. To bring it about, you must stake your initial position – which is what the party’s platform does – and set thin red lines which, if the other side crosses, you walk out. One such line, in Greece’s case, must concern the demand that Greece borrows from, amongst others, the ECB to repay the… ECB for bonds that the ECB bought in 2010/1. If Berlin continues to insist on such illogical transactions, a SYRIZA government must simply say ‘No’ and refuse to do it. Whatever the threats.

In these three and a half years of the troika regime, Greece has lost important parts of public land and areas of national strategic interest in a program of wild privatization. Is SYRIZA thinking of a new state intervention to nationalize at least the essential public services to be delivered to the citizens? And in that case it would not be a violation of the principle of non-interventionism enshrined by the Maastricht Treaty?

The privatisation program has failed spectacularly. There are, indeed, some assets that have been turned over to shady privateers (e.g. the national lottery and the Hellenikon site) which a new government must look at afresh – at least in terms of their legality as re-nationalisation will be impossible given the state’s illiquidity. Having said all this, the most extensive privatisations took place not during 2010-14 but during 2000-2009 involving banks, the state telecommunications monopoly etc. As for public services, the problem there is not that they were privatised. The problem was that they were dismantled or strangled by austerity and hideous cutbacks.

However, the response of European crisis continues to be clear and summarized in the reduction of public spending, increasing taxation and so-called structural reforms to bring down the cost of labour, the only way to compensate for the competitiveness gap between countries. Compared to this, Syriza puts forward very interesting proposals, but those are measures that had been rejected in the past by Brussels, because they violate the rules of the existing treaties, such as Eurobonds and the political control of the European states on the European Central Bank. Do you believe that it is time to overcome Maastricht and to start thinking about a new Treaty?

Our proposals have been calibrated in a way that they do not violate any of the Treaties. For instance, our proposal for an ECB-mediated conversion loan for the Maastricht compliant part of each member-state’s debt, without monetisation by the ECB or debt guarantees by the surplus countries. Or, to give another example, the proposal for a form of Quantitative Easing where the ECB buys large quantities of European Investment Bank bonds for the purposes of funding a European invstement-led Recovery Program. These are some of a number of ideas that can be implemented tomorrow morning, political will permitting. Once we stabilise Europe by means of such policies, we can then talk until the cows come home about a future federation, future Treaties etc. But any attempt to tamper with the Treaties now, while the crisis percolates, will only backfire.

In the event that the countries of the North, as already claimed in the past, will oppose these scenarios of change needed to overcome the crisis, should the countries of the South, in particular the parties critical of the current institutional architecture, start thinking about a new form of integration funded on economic and social solidarity, which aim to the respect of the national sovereignty? Due to the severe conditions of their economies, is there still time to deal with a drawing up of a new Treaty based on those principles?

No, I do not think so. As I argued above, this is not the time for Treaty changes. First we must halt the fragmentation and only then discuss consolidation. Having said that, the current Treaties allow for so-called ‘enhanced cooperation’ – which allows for nine member-states or more to go it alone in the implementation of European Union policies that are not binding on the rest. Perhaps Europe’s ‘South’ could use this institutional facility.

On the opposite side, Europe seems to head very quickly toward a road opposite to that outlined by Syriza. This is clear especially after the sanctions to Russia and the political interferences of NATO in Ukraine, the inevitable passage of TTIP, the area of free trade with the United States, which the European elites want to approve in 2015. Could a new majority of Syriza in the national Parliament stop the ratification of TTIP?

The idea of free trade with the United States is splendid. The problem with TTIP is that it is not at all about free trade but, rather, about handing inordinate property rights over environmental standards and intellectual property to multinational corporations. Similarly with the security issue. Ukraine should be stabilised and Russia democratised. Alas, the current standoff with Moscow is not about this but, rather, it is part of a grubby geopolitical tussle out of which Europe’s citizens, from the Atlantic to the Urals, will lose out.


  • In England are two parties that could change everything in Europe.

    One leaves EU membership with UKIP that could form a Coalition with the Tories in 2015 and bring about a referendum in UK leaving EU.

    The other, The Greens if put Greens’ new and unique policies into Greens’ 2015 manifesto, The Greens could be the only member of the EU that has policies that put Auterity into reverse and save all the lives of the lowest income of all ages.

    Greens would replace all the cruel benefits regime that is causing starvation in the UK, with:

    – universal and automatic Citizen Income, in or out of work just the same, to the level of the basic tax allowance.
    – Full State Pension to all citizens, irregardless of National Insurance Fund contribution / credit history, to same if not better level as basic tax allowance.
    Both of these policies grant a supplement for those living alone for those who are disabled.
    This saves huge millions in public and private contracts in benefit admin, which is rising by the billions each year, whilst money going to the starving is being totally lost for months or completely gone, when it takes a month to starve to death.

    I keep trying to tell The Greens in the UK that two of their polices, on their policy website but not in The Greens’ 2015 general election campaign, could give them as big a rise as Greece’s SY.RIZ.A, now on course to run the nation from January/February 2015. Who am I? A UK victim of pension and welfare reform amongst at least 13 million poor, made all the poorer by Austerity in or out of work, as both equally seek help from foodbanks, that are not daily free cafes as elsewhere in Europe, but only 3 vouchers A YEAR of permitted food vouchers.

    This when the ring fenced and full National Insurance Fund (source of funding of UK’s state pension) is being called in surplus since 2013, when this is the non-paid-out state pension so denying payout for 7 years to a couple since 2013.

    By this denied state pension payout, the half of oiver 60s in low waged jobs, still having compulsory 12 per cent per year deductions for National Insurance contributions yet forever losing anything up to £40,000 payout over 7 years of state pension as a couple, that could have helped the working poor and unemployed losing benefits with 1 million benefit sanctions a year, both going to foodbanks as no money for food.

    In UK women born from 1953 and men born from 1951 will end up with NIL STATE PENSION FOR LIFE (sole income in old age
    lost forever) and over 70 per cent of rest on LESS NOT MORE of the lowest state pension of all rich nations bar poor Mexico.

  • SYRIZA is dealing from a weak hand here but I wish you all the best. I hope backdoor plans are being made in the event of a forced EURO exit.

    • At least something new for a change, after all these years with back-room plans!

    • Thank you Dean: a wonderful essay and a wonderful hope for 2015 on both counts: first bring down the euro and then the EU. I’m with Worstall 100%. Under the guise of economics, both stand exposed as wholly political projects.

      Unfortunately euro-exit is the option that dare not speak its name – not rationally anyway – in Greece’s current pre-election debate, creating difficulties for SYRIZA in its role as agent-for-change. SYRIZA is determined to fight for Greece within the current structures – not unwise since this protects Greece from further exceptional, wholly undeserved punishment. On the other hand there will come a time when Greece and Greeks will have to decide which option is ultimately more destructive – and whether they are prepared to fight for self-determination. Given the new memorandum hanging like a sword of Damocles over our heads, this may well be after an inconclusive or lost election and too late.

      We live in an era and in a greater geographic zone where nothing grown-up can be discussed, nor Europe’s real predicament exposed.

  • “Exit from the euro is not an idea that a SYRIZA government will ever entertain or use as a negotiating strategy.”

    For the life of me Yanis why would you hold this position of “Never”?

    • Simple. We shall never do them the favour of exiting into the night voluntarily. If they insist on destroying our people we shall resist until they throw us out at a huge cost to everyone.

    • I don’t see how we are resisting. We up until now we have bowed to their wishes.
      And have been destroying our people by doing so.

      “destroying our people”
      If you have the time can you tell me why you think been thrown out or leaving voluntarily would destroy our people?

    • Our governments so fat have been bending over. Ours, if we get to form one, will resist tooth and nail.

      >Tell me why you think been thrown out or leaving voluntarily would destroy our people

      We are no Argentina. Argentina had the peso and ‘liberation’ entailed one simple move: To sever the dollar-peso peg. We do not have a peg between the euro and our drachma. Thus getting out voluntarily would mean to volunteer to announce 12 months in advance (for this is how long it takes to create a new currency) that our new currency will be devalued. That would spell disaster as even petit bourgeois Greeks will start selling assets to get the money out of the country. A devaluation that is preannounced 12 months in advance would take us to the neolithic age. Within days, our government will have fallen and our people will become hostages of an IMF-funded neoliberal government. Of course, things would be different if Greece was pushed, illegally, out of the Eurozone. Then a sense of injustice and solidarity would make it possible for Greek society to band together and repel the neoliberal onslaught.

  • SYRIZA says they do not want to leave the euro. But they plan to default on loans. Because the so called renegotiation is not just blackmail, it is at least a partial default. The euro zone taxpayers will gladly welcome to absorb the Greek default, they would even be so nice and agree to pour more and more of their very own taxpayer’s funds into a country which does not change. So Greece would have a limitless line of Euro credit. Which allows her to reinstall the status quo ante 2010 and continue to live on borrowed money forever. She would be perfectly equipped to survive in a hard currency environment.

    Wait, something is wrong here.

    • You are so wrong about SYRIZA’s intentions that I do not know where to begin. So, I shall simply say nothing – if you decide to think more clearly I may attempt to explain. Talking over loud. mistaken preconceptions is tedious…

    • Joker Sam, either you represent BILD on this thread, or you are choking on its carrion-feed.

  • I wonder if we should all get back to basics before we start hoping to politically reverse such which by definition can not be reversed via political action. There is not even an iota of hope for more Europe(the only way the problem could be solved). Some Greeks might want it but most Europeans don’t. Therefore such idea needs to be abandoned for good as non-pragmatic and unrealistic. Hence the essence of our current problem and our futile attempts to solve it. We really have a very serious problem in our hands.

    • Agree Dean. But soon our disease will spread to other parts and hopefully it will be then when people finally realize where this is headed. Will they take imprisonment and negative freedom over autonomy and positive freedom? Professor Castoriades among others have already seen to this point, and in the end, we will need unity of will over will to power.

    • Dean – this is a thoroughly dishonest and vulgar smear from a Greek NATO scholar at Harvard abusing the “authority’ of the Brookings Institute to launder underhanded statements. Sadly, it reflects badly on Brookings.


      “The common mistake that most analysts outside the country used to make regarding Greece was to assume that political players are more or less rational, and serious misjudgments and miscalculations are almost impossible. So, the majority of them seem to believe that Syriza will finally transform itself into a social democratic, systemic party or, having recognized the serious political risk the party’s rise poses, the majority will vote against Syriza and reverse its current 4-5 percent lead in the polls.

      One should not underestimate the mental depression suffered by many Greeks during the past five years of economic depression and its impact on the rationality and the measured judgment of voters, nor the impact of misinformation coming from populist media dominated by special interests keen to see the return of the drachma and an end to their financial obligations.”
      etc. etc.


      It is also simple anti-SYRIZA propaganda.
      Instead of coming out cleanly against SYRIZA, and stating his own allegiances, he tars not only all Greek politicians, but the entire Greek nation’s ability to think clearly and make rational judgements and choices……..on the basis of irrationality due to depression! Morever, he fails to explain WHY he qualifies as an exception, and, more important, to explain the ‘rationality’ of Austerity.

      An honest commentator would have dissected SYRIZA’s program to prove his point; and also dissected the arguments of the ever-increasing tide of EU and international economists, financial journalists, parties and politicians who acknowledge SYRIZA’s program as (1) rational and well-analysed; and (2) inevitable; that is, an inevitable, reasoned opposition to the destructive Austerity policies that by now, alone in the EU, only Germany’s Merkel-led CDU openly backs. In fact, under EU peer pressure, Merkel yesterday announced that she is open to discussion.

      We “irrational, depressive” Greek voters have this choice:
      A. deciding that a European-wide debate is necessary over proven destructive policies – destructive not only to Greece but to the entire Eurozone including Germany (SYRIZA)
      – or –
      B. that unchallenged German-imposed Austerity is the correct solution for the Eurozone and Greece, despite cataastrohic evidence to the contrary. (ND, PASOK)

      Moreover, should SYRIZA form a government, it is clear to every Greek that the Greek-mounted challenge to Austerity will move upward to the EZ / EU arena where it belongs.

    • Thanks for the Pelagidis heads up Dean. Ordered his books and will get back to you

  • As I read the interview, I couldn’t help noticing the persistence of the journalist on asking questions about treaty changes. Correct me if I ‘m wrong but, I get the feeling that all the fuzz is about political union and not the real problems. Politicians know that treaty changes are imminent and will try to get the best out of it. That applies to both northern and southern. As for enhanced cooperation, the P.I.I.G.S. , assuming that they will agree which is already very difficult, will need other countries to back them up (Britain????). This simmering could take ages.

  • Yanis – I agree with nearly all your points, but I would argue Ukraine is NOT some minor geopolitical conflict which doesn’t matter to Europe. In 2014, Ukraine had a progressive and democratic protest movement against its own neoliberal kleptocracy — a Syriza of the streets, which succeeded in toppling a horribly corrupt President who had looted the country, and ushered in subsequent free and fair presidential and parliamentary elections. In response, Russia’s thuggish, thieving plutocracy invaded Ukraine, in a monstrous and evil war of colonial aggression (evidence: (There’s a long and complex history here. The Romanov and Soviet empires had colonized Ukraine for 400 years, and to this day many ordinary Russians wrongly assume that Ukraine is just another province of Russia, when in fact it is a separate country with its own distinctly non-Russian language, identity and history. It’s like how 1930s British citizens thought of India, or 1950s French citizens thought of Algeria.). Putinism’s war also ended up murdering 206 innocent European citizens on Malaysia’s MH-17 (Eliot Higgins provides this excellent analysis: Part of this invasion was a campaign of Russo-imperial lies, spewed by Russia Today and other Putinist venues, claiming that the Ukrainian people are CIA agents, fascists, Nazis, anti-Semites, a military junta, etc. All reprehensible lies, which took advantage of the Russian people’s basic misunderstanding about Ukraine. (Julie Davis provides this handy take-down of the smear campaign: So sanctions against Russia’s oil industry are an entirely appropriate response. (If only the world had had the courage to sanction the Bush-Cheney oiligarchy for its equally monstrous war of colonial aggression against Iraq in 2003, our world would be a better place). Basically, the Spanish indignados, ordinary Greeks, citizens of Europe, and the long-suffering peoples of Ukraine and Russia are all in this together against their respective plutocratic elites — the fight against neocolonial Putinists, and against Ukraine’s own corrupt oligarchs, is part and parcel of the fight against Europe’s austerity-mongering Minotaurists.

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